How the Smart Grid is becoming smarter

Electric utility companies are struggling to provide cost-effective and clean energy alternatives to a market where demand is exceeding capacity. The need to curtail demand during periods of peak load is a matter of prime importance. Solving the issue on the supply side by adding new capacity is one option; however, the expense and the bureaucratic hurdles required to build new facilities makes this solution less than ideal; demand side solutions are preferable but can be challenging to implement. This article explains some of the tools and standards that can be used to achieve demand side control.

Governmental regulations to reduce greenhouse CO2 emissions and the reliance on off-shore energy for electrical generation require the introduction of new technologies into the electrical grid. These new technologies must make the smart grid ‘smarter’ by providing utility companies with a type of demand response capability that not only informs the market of peak demand and price variations, but also offers the means to control demand during these periods. Consumers need to know when demand is exceeding capacity and when rates are high, so informed decisions can be made.

Utility companies must have tools to reduce demand when capacity is exceeded. Working with electric utility companies, industrial and commercial customers have already begun to integrate smart energy features into their systems. With the early success of these systems, a smart grid for residential customers is quickly becoming a reality (Figure 1).

Figure 1: The key difference for the grid of the future will be to transition from blind delivery to a closed loop with commands, requests, and status traveling in both directions.

Is there a good supply side solution? For the last three decades the growth in peak demand has exceeded the growth in electric utility companies’ transmission capability by more than 25 percent. Estimates vary; however, the U.S. Department of Energy (U.S. DOE) reports suggest a $1.5 trillion investment will be required over the next 20 years to pay for infrastructure alone to support the growing demand. Today, a large portion of a consumer’s electric bill goes towards grid upkeep.

Any future grid investment will be passed directly to the consumer, and that will be on top of the expected rate increases of 50 percent over the next few years. The prospects don’t look good for a cost effective supply side solution. A smarter grid is required.

Allowing customers to take controlReducing demand by as little as 5 percent during peak periods can save between $50 and $100 billion annually according to the U.S. DOE. One approach to managing demand during peak periods is to deploy a standards-based framework that allows electric utilities to communicate directly to customers. Open Automated Demand Response (OpenADR) is one standard that is being embraced (Figure 2). OpenADR messages provide demand response information to inform customers of pending price changes due to excess demand.

Figure 2: A two stage approach, with the producer maintaining control to the meter, and an open system architecture integrating customer devices provides full end-to-end functionality.

Because OpenADR can be used with existing protocols and control systems, it has been quickly embraced by industrial and commercial customers, many of which have sophisticated communication protocols in place that are capable of controlling individual devices. The Building and Automation Control Network (BACnet) is one example of an industrial network protocol.

Designed to control applications such as heating, air-conditioning, lighting control, fire detection, and access control, BACnet provides building automation to exchange information over existing IP networks in an effort to maximize energy efficiency. The combination of OpenADR messages from the utility company and a BACnet-capable network to automatically execute the appropriate response has been proven to lower electric demands during peak periods for industrial and commercial customers. In order to expand the benefit of standards like OpenADR to residential customers, a protocol must be introduced to the home that can manage appliances, lighting, and environmental conditions without the need for complex device configuration. Further, it must work over existing home networks.